5 minutes, completely locked at the daily limit! A trillion-dollar giant, fully ignited! The entire sector surges collectively.

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Today it’s the turn of innovative medicines!

Yesterday it was lithium batteries, today it’s innovative medicines. On the morning of March 27, the innovative medicine concept continued to rise, with Menarini (rights protection) hitting the daily limit within five minutes of opening, Kintor Pharmaceuticals hitting a 20% limit, and Wanbangda, Lianhuan Pharmaceutical, and Shuanglu Pharmaceutical also hitting limits, while Hotgen Biotech and Yinoz surged over 10%. The A-share innovative medicine sector rose by 3%.

The Hong Kong stock market also reacted, with Innovent Biologics achieving full profitability for the first time, and significant strategic cooperation accelerating the realization of its pipeline’s global value, with the stock once surging over 7%. This completely ignited the entire biopharmaceutical sector. Moreover, Novo Nordisk’s semaglutide patent for its core compound expired in China. This product, known as the “king of global pharmaceuticals,” has now broken the long-standing monopoly, also sparking market interest in Chinese weight loss drug concept stocks.

Innovative medicines soar collectively

On the morning of March 27, innovative medicines soared over 3%. Wanbangda rose to its limit, Lianhuan Pharmaceutical had previously hit the limit, Menarini achieved its fourth consecutive limit, Hotgen Biotech rose over 15%, and over ten stocks including Yinoz, Haichuang Pharmaceuticals, Shutai Shen, and Hengrui Medicine rose over 6%.

In the Hong Kong market, innovative medicines also soared collectively. The sector’s increase approached 3%, with Innovent Biologics once up over 7%. On March 26, Innovent Biologics released its 2025 annual report, stating that the company achieved total revenue of 13.042 billion yuan for the year, a year-on-year increase of 38.4%; net profit attributable to shareholders was 814 million yuan, a year-on-year increase of 959.72%, marking the company’s first annual profit. In the announcement, Innovent stated that 2025 is a significant milestone in the company’s history, achieving historic breakthroughs in business scale, profitability, and global innovation.

Analysts believe that Innovent Biologics, based in China, is expected to become a top-tier global biopharmaceutical company by 2030, with 12 out of 18 listed products included in medical insurance. The rapid growth of drugs like mazdutide and PCSK9 monoclonal antibodies in the CVM sector and the addition of new indications for PD-1 monoclonal antibodies in the oncology sector included in medical insurance will drive product revenue growth by 44.6%. The upfront cash payments for collaborations in 2025 exceeded $1.6 billion, with a total transaction amount exceeding $22 billion. Through self-construction and strategic cooperation (such as the Takeda Co-Co model), the company is expanding its global team, enhancing international R&D, registration, and commercialization capabilities. Innovent’s turnaround is of milestone significance, highly valuable, breaking the market stereotype of “high investment, low output” for innovative pharmaceutical companies, and serving as an important catalyst for the valuation recovery of the innovative medicine sector.

Additionally, Novo Nordisk’s semaglutide patent for its core compound expired in China. Semaglutide is a new long-acting GLP-1 analog developed by Novo Nordisk, topping the global prescription drug sales charts due to its significant weight loss and blood sugar-lowering effects, serving as the core engine for Novo Nordisk’s performance growth. According to a report by IQVIA, the domestic GLP-1 drug market has considerable potential. It is expected that by 2032, the market size for type 2 diabetes treatment will reach 68.8 billion yuan, while the market size for obesity treatment will reach 42.7 billion yuan, with the two core indications combined exceeding 100 billion.

Expectation gaps still exist

Stock price increases are often due to expectation gaps. Huatai Securities believes that China’s innovative medicines are at the starting point of a long-term cycle, with high-quality assets being exported globally, and their potential is not fully reflected in the A/H stock pricing.

The number and amount of BD transactions for Chinese innovative medicines going abroad have reached new highs, with a significant increase in global share, and BD continues to grow with high foreseeability. The expectation gap regarding the continuous contribution of catalysts to BD cash flow is substantial. Numerous clinical data will be disclosed at major conferences like AACR, ASCO, ADA, and others from April to June; the positive impact of significant data releases will benefit the overall market; platform companies continuously generating BD will bring sustained high cash flow, and this “Chinese model” has yet to be fully valued.

Innovative medicine assets are relatively undervalued in A/H stocks, primarily due to systemic underestimation by A/H capital markets of Chinese innovative pharmaceutical companies’ overseas revenues and errors in predicting future overseas cash flows. The BD of platform companies is sustainable and will become a major business model.

It is worth noting that the 2026 government work report proposed “building emerging pillar industries such as integrated circuits, aerospace, biomedicine, and low-altitude economy.” Compared to the 2025 report’s expression of “cultivating and growing emerging industries and future industries,” the industrial positioning of biomedicine has clearly moved up, being placed for the first time at the level of “emerging pillar industries,” further strengthening its strategic significance.

Guosheng Securities believes that for the pharmaceutical sector, this indicates that policy positioning for biomedicine is upgrading from “nurturing emerging tracks” to “an important pillar direction for economic growth and industrial upgrade,” with innovative medicines being the most core high-value-added segment of the biomedicine industry, particularly benefiting from this direction.

Editor: Luo Xiaoxia

Layout: Wang Lulu

Proofreader: Lü Jiubiao

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Editor: Shi Xiuzhen SF183